The introduction of the Dencun upgrade, a low-cost upgrade for layer 2 blockchains to quickly scale the network to peer-to-peer networks, has sparked a flurry of activity on the decentralized smart contract network Ethereum.

Since then, ETH gas fees on Ethereum's base layer have dropped significantly. While this has reduced validator revenues, the low-fee L2 has seen a boom in activity.

The monthly active users of Ethereum L2 have doubled since Dencun went into effect in March. Meanwhile, fees for using Base, Mantra, Starknet, Blast, and OP Mainnet have all dropped significantly.

Will Ether's price continue to fluctuate and fall, or will it have an advantage over competitors like BNB, Solana, XRP, Tron, and Cardano in the short to medium term?

4 Factors Behind Ethereum Price Growth in 2024

Here are four advantages that Ethereum will have in the future:

1. Another Wrapped Bitcoin on Ethereum

21co, the owner of the 21 Shares Bitcoin ETF issuer, recently introduced another Wrapped Bitcoin asset on Ethereum.

While Bitcoin is in a long-term holding phase due to its network effects and the prospect of each satoshi increasing in value due to its eventually addressable global market, when the dam breaks and pent-up demand spills out, Ethereum will certainly be the place where holders will spend it.

From finance to insurance, contracts, CRM, supply chain management, gaming, and online database solutions, leading smart contract networks like Ethereum have a bright future.

2. Institutional Adoption Continues

Wall Street has been lukewarm on the Ethereum ETF so far, with outflows creating resistance to Ether’s price. But overall institutional sentiment toward the asset is still second only to Bitcoin, even as corporate project managers and institutional hedge funds flirt with Ethereum competitors like Solana and Cardano.

However, Ethereum and the ERC20 Layer-2 Polygon (MATIC) protocol support the majority of institutional products currently available on Web3.

For example, as recently as August 22, Sony announced the launch of its own Ethereum Layer-2 blockchain, Soneium.

3. Ethereum Price Chart Technicals

ETH just had its worst month in two years, falling 22% in August. As such, mean reversion theory predicts that its price will tend to revert to its average trend over time, giving it support for a rally. In buyers’ terms, Ether was selling in August.

According to a recent study by CoinGecko, ETH may be undervalued, based on forecasts from experts at some of the most active funds, publications, and banks in the Web3 space.

4. The Fed’s Soft Pivot to Crypto

The Federal Reserve Chairman announcing a pivot to lower interest rates in August is likely to revive crypto markets. As the dollar supply increases, there is additional liquidity to pump up financial markets like stocks and cryptocurrencies.

There is also a well-established trend among crypto investors to hedge dollar inflation with cryptocurrencies, especially those that strictly limit new supply.

Ethereum is particularly well-suited as one such alternative, trusted currency. After Merge moved it from a mineable to a staking cryptocurrency in September 2022, it also introduced a burn feature that removes a small amount of Ether when transactions are made.

This helps limit supply and maintain purchasing power parity of ETH tokens against other currencies such as Bitcoin and the US dollar.

3 Factors Against Ethereum Price Growth in September:

1. September Doldrums and Headwinds

September is historically a down month for financial markets. In stocks, it is the only calendar month to have delivered an average negative return on investment over the past 98 years. For crypto assets, it has also typically been choppy and slow, with seasonally high volatility and lower prices.

This means that it can be a great entry point for crypto investors to buy assets at a good price. It is also not usually the time of year to sell to maximize profits or minimize losses.

2. US Election Uncertainty

Markets are also worried about the outcome of the US election in November. A Harris victory could lead to higher prices, higher taxes, and more expensive regulations.

A Trump victory could lead to another multi-trillion dollar trade war with half the rest of the world, which cost Wall Street dearly last time.

3. Bitcoin Price Gravity Well

Ethereum's valuation is closely tied to the spot price of BTC. During the four-year cycle around Bitcoin supply halvings, there tends to be a mild bear market around that time after the event, leading to